Reassignment Of Benefits

§ 424.80 Prohibition of reassignment of claims by suppliers.

(a)Basic prohibition. Except as specified in paragraph (b) of this section, Medicare does not pay amounts that are due a supplier under an assignment to any other person under reassignment, power of attorney, or any other direct arrangement. Nothing in this section alters a party's obligations under the anti-kickback statute (section 1128B(b) of the Act), the physician self-referral prohibition (section 1877 of the Act), the rules regarding physician billing for purchased diagnostic tests ( § 414.50 of this chapter), the rules regarding payment for services and supplies incident to a physician's professional services ( § 410.26 of this chapter), or any other applicable Medicare laws, rules, or regulations.

(b)Exceptions to the basic rule -

(1)Payment to employer.Medicare may pay the supplier's employer if the supplier is required, as a condition of employment, to turn over to the employer the fees for his or her services.

(2)Payment to an entity under a contractual arrangement.Medicare may pay an entity enrolled in the Medicare program if there is a contractual arrangement between the entity and the supplier under which the entity bills for the supplier's services, subject to the provisions of paragraph (d) of this section.

(3)Payment to a government agency or entity. Subject to the requirements of the Assignment of Claims Act ( 31 U.S.C. 3727), Medicare may pay a government agency or entity under a reassignment by the supplier.

(4)Payment under a reassignment established by court order.Medicare may pay under a reassignment established by, or in accordance with, the order of a court competent jurisdiction, if the reassignment meets the conditions set forth in § 424.90.

(5)Payment to an agent.Medicare may pay an agent who furnishes billing and collection services to the supplier, or to the employer, facility, or system specified in paragraphs (b) (1), (2) and (3) of this section, if the conditions of § 424.73(b)(3) for payment to a provider's agent are met by the agent of the supplier or of the employer, facility, or system. Payment to an agent will always be made in the name of the supplier or the employer, facility, or system.

(c)Rules applicable to an employer or entity. An employer or entity that may receive payment under paragraph (b)(1) or (b)(2) of this section is considered the supplier of those services for purposes of subparts C, D, and E of this part, subject to the provisions of paragraph (d) of this section.

(d)Reassignment to an entity under an employer-employee relationship or under a contractual arrangement: Conditions and limitations -

(1)Liability of the parties. An entity enrolled in the Medicare program that receives payment under a contractual arrangement under paragraph (b)(2) of this section and the supplier that otherwise receives payment are jointly and severally responsible for any Medicareoverpayment to that entity.

(2)Access to records. The supplier who furnishes the service has unrestricted access to claims submitted by an entity for services provided by that supplier. This paragraph applies irrespective of whether the supplier is an employee or whether the service is provided under a contractual arrangement. If an entity refuses to provide, upon request, the billing information to the supplier performing the service, the entity's right to receive reassigned benefits may be revoked under § 424.82(c)(3).

(3)Reassignment of the technical or professional component of a diagnostic test. If a physician or other supplier bills for the technical or professional component of a diagnostic test covered under section 1861(s)(3) of the Act and paid for under part 414 of this chapter (other than clinical diagnostic laboratory tests paid under section 1833(a)(2)(D) of the Act, which are subject to the special rules set forth in section 1833(h)(5)(A) of the Act) following a reassignment from a physician or other supplier who performed the technical or professional component, the amount payable to the billing physician or other supplier may be subject to the limits specified in § 414.50 of this chapter.

[ 53 FR 6634, Mar. 2, 1988, as amended at 54 FR 4027, Jan. 27, 1989; 69 FR 66426, Nov. 15, 2004; 70 FR 16722, Apr. 1, 2005; 71 FR 69788, Dec. 1, 2006; 72 FR 66406, Nov. 27, 2007]

Providers reassign Medicare and other third party benefits all the time. That is, they hand over individual provider numbers so that their employer entity can use it to bill and be paid for services rendered. Sounds like a perfect arrangement doesn’t it? 

However, this is often completed as a matter of course without much thought to the implications of the power being bestowed on the employer. The physician can be found responsible for inappropriate, abusive or fraudulent billing if they knew or should have known the services being billed were inappropriate.  Do you know what you employer organization billed as having been rendered by you? 

On February 8, 2012 the OIG (Office of Inspector General) issued and alert that warned providers to be cautious about the organizations to which they reassign benefits. Medicare generally prohibits reassignment of benefits but a physician-employer contract is an exception to that prohibition. The OIG cautions that although the billing entity is responsible for any overpayments resulting from inappropriate billing, the physician has culpability as well. 

According to the reassignment agreement as written by Medicare, the physician or the supplier of the service MUST have unrestricted access to the claims information submitted by the entity. That puts the burden of monitoring squarely on the physician’s shoulders. Physicians are expected to, obligated to, monitor the services that are being billed under their reassigned provider number. 

While the examples in the OIG Alert seem extreme, the simple fact is, these providers did not monitor what was being billed out as having been rendered by them or under their supervision. What structure do you have in place to mitigate the risk associated with incorrect, inappropriate, or even fraudulent billing? Physicians must proactively monitor claims. 

Read the Full alert from the OIG here:

Published in PMG Insights Blog

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